Author Topic: 2010 Fotolia Tax coming !! (Read 22047 times)

vii-studio · « **on:** January 01, 2010, 06:21 »

I got mail from Fotolia ：

----------------------------------------
Dear Contributor,
We are happy to inform you that one of your files has been sold.Selling creative content licenses is an economic activity. Income derived from these sales may be subject to U.S. IRS (Internal Revenue Service) Withholding Tax. It is important that our contributors, and Fotolia, comply with tax law. So, we invite you to visit the Tax Center and to review the information listed on that page. Until you complete this procedure and the appropriate form is validated, your Fotolia income will be subject to automatic withholding at the appropriate tax rate. By submitting the applicable form, you may benefit from a reduced or zero withholding rate on your income.We suggest you complete this procedure as soon as possible.
Best Regards,Fotolia Team
------------------------------------------

Then I check my sold image (subscription)：

Purchase Date : 2010-01-01 11:43:36
Purchase License : L
Commission : 0.2232

0.2232.....so sad. It was 0.31 before. So, My question is Fotolia withhold every sold image? Did anyone sold image without withhold (not US buyer)?

And, my country in Taiwan and had no Tax Treaty.....

madelaide · « **Reply #1 on:** January 01, 2010, 10:17 »

The worst part is that I will pay taxes over these 22c too later. The double-taxation is what bothers me.

lisafx · « **Reply #2 on:** January 01, 2010, 11:46 »

I got it too, and I am a US contributor. They already had a w-9 on me, but for some reason I had to fill out a new one. Now I have to wait for it to be examined and approved. Hopefully will not take too long....

GeoPappas · « **Reply #3 on:** January 01, 2010, 12:30 »

Quote from: lisafx on January 01, 2010, 11:46

I got it too, and I am a US contributor. They already had a w-9 on me, but for some reason I had to fill out a new one. Now I have to wait for it to be examined and approved. Hopefully will not take too long....

Ditto...

le_cyclope · « **Reply #4 on:** January 01, 2010, 13:50 »

Same here...

But the worst part is that I tried many times to fill and send the form but each time got an error message (An error has occured. Please try again later). Sent an email about what to do...

Does anybody knows if the withholding tax is permanent or it will be «re-imboursed» (is that the word?!) when forms are finally filled and accepted?

Claude

FD · « **Reply #5 on:** January 01, 2010, 15:22 »

I just had a look and my last sale yesterday Dec 31 was 0.31$ XS Standard. Today's (Jan 1, 2010) the first XS Standard sale was 0.196$. That's simply too low.

Kngkyle · « **Reply #6 on:** January 01, 2010, 16:55 »

Quote from: le_cyclope on January 01, 2010, 13:50

Does anybody knows if the withholding tax is permanent or it will be «re-imboursed» (is that the word?!) when forms are finally filled and accepted?
Claude

I sure as hell hope so. I looked briefly on the forums and didn't find an answer.

FD · « **Reply #7 on:** January 01, 2010, 17:51 »

Fotolia clearly has a serious cash flow problem. Contributors waiting to ask payout and the undue 30% tax for 0% treaty countries contributors will help.

Asking a TIN nr requires a snail mail letter from FT and the entire procedure takes 3 months, yet they announced it shortly before the holidays. Nuf said.

brm1949 · « **Reply #8 on:** January 01, 2010, 18:13 »

I didn't make any sales yet this year, but I checked out the tax center and filled out the W-9 anyway. Now I'm waiting for the approval also. The tax situation for micro royalties with most agencies outside USA has me completely confused on what to file. Is there a thread that covers to whole tax question with mirostock from a USA prospective?

sharpshot · « **Reply #9 on:** January 01, 2010, 18:15 »

Quote from: FD-amateur on January 01, 2010, 17:51

Fotolia clearly has a serious cash flow problem. Contributors waiting to ask payout and the undue 30% tax for 0% treaty countries contributors will help.

Asking a TIN nr requires a snail mail letter from FT and the entire procedure takes 3 months, yet they announced it shortly before the holidays. Nuf said.

I don't think they have a cash flow problem, just a serious lack of respect for their contributors that is going to damage their business. There is no comparison with the sensible way shutterstock handled this, after initially making mistakes. They promised early on to at least give everyone time to get the ITIN number and then they found we didn't need it. Fotolia should of learned from them, they had 6 months longer than shutterstock to sort this out. It is hard to believe they didn't know the IRS would want them to withhold tax after what shutterstock went through.

Eireann · « **Reply #10 on:** January 01, 2010, 18:40 »

Hi,
this is what I got.
01 Jan 2010 - 2 sales.

File Name : Vector Back to school in September
Purchase Date : 2010-01-01 16:46:16
Purchase License : XS
Sale Price : 1
------------------------------------------

File Name : Vector Christmas golden candle border
Purchase Date : 2010-01-01 16:05:43
Purchase License : L
Commission : 0.216

-------------------------------------
Previous credits = 28.1
Today credits = 28.496

Are they deducting 30% of every single sale? Regardless of where it comes from?
Does anybody know?

le_cyclope · « **Reply #11 on:** January 01, 2010, 18:53 »

From what I see on my sales, the amount for the sale is shown without any deduction. You see the deductions in the Account Information (the left part of the screen) in terms of credit.

Claude

Eireann · « **Reply #12 on:** January 01, 2010, 19:00 »

Right.
I managed to get the site to load and checked my 'Credits' tab.
Both sales show a 28% tax deduction.
Does that mean both buyers were Americans? And how do we know that? Is there a link to show this info?
Or is Fotolia simply deducting taxes on each and every single sale regardless of the country of origin?

FD · « **Reply #13 on:** January 01, 2010, 19:11 »

Quote from: Eireann on January 01, 2010, 19:00

Does that mean both buyers were Americans?

Not. You'll have to trust them.

Konstantin Sutyagin · « **Reply #14 on:** January 01, 2010, 20:07 »

Quote from: FD-amateur on January 01, 2010, 19:11

Quote from: Eireann on January 01, 2010, 19:00
Does that mean both buyers were Americans?
Not. You'll have to trust them.

oh, how can we not trust them?

Whiz · « **Reply #15 on:** January 01, 2010, 21:03 »

Quote from: lisafx on January 01, 2010, 11:46

I got it too, and I am a US contributor. They already had a w-9 on me, but for some reason I had to fill out a new one. Now I have to wait for it to be examined and approved. Hopefully will not take too long....

Yeesh, I wonder what happened to the first one you sent in. Did you ask them? Just curious.

Adeptris · « **Reply #16 on:** January 02, 2010, 05:02 »

Quote from: Konstantin Sutyagin on January 01, 2010, 20:07

Quote from: FD-amateur on January 01, 2010, 19:11
Quote from: Eireann on January 01, 2010, 19:00
Does that mean both buyers were Americans?
Not. You'll have to trust them.

oh, how can we not trust them?

I must agree with Konstantin, as you already trust them enough to upload your full sized assets to them, and allow them to represent you as an agent in the sale of licenses, you trust them to report sales, sizes and license types, why would you doubt that the sales are in the US?

Looking at it from another perspective, they are an established business which will have audits on the accounts and are not going to risk the damage of legal actions for fruad, if you doubt that the buyers were from the US, then what about doubting the number of sales, or the sizes that was sold, the license type, was it really an EL but put through as a normal sale, collecting withholding tax under a false pretence would be fraud, not passsing this on could mean going to prison.

If you do not trust them on one thing then the only action is to close your account with them!

David

ThomasAmby · « **Reply #17 on:** January 02, 2010, 06:33 »

All of my sales since January 1st have been arranged for a 30% deduction. There is no way all of these could have come from the US.

I believed the deduction would only affect PAYMENTS, not each sale. I don't expect them to reimburse the money (MY money), and generally I am very, very, very disappointed with the way they are handling this situation. They expect people to acquire an ITIN on such short notice, and don't even bother to give us the appropriate means to do so. . How am I supposed to apply for an ITIN without a signed letter, that is NOT JUST an e-mail?

Adeptris · « **Reply #18 on:** January 02, 2010, 07:36 »

Hi Tomas,
You are correct withholding Tax should only affect the sales made to US Customers, but it is on a per sale basis and not total payment, if you are correct about all sales being subject to WHT then Fotolia have it wrong.

Looking at Alexa the majority of users are from Germany, maybe there is some confusion with the Fotolia software developers as there should be no withholding tax on non US sales and with only 12.7% of traffic being from the US the percentages should be small, even after making allowances for contributor vs buyer location.

Fotolia.com users come from these countries:
30.1% Germany
12.7% United States
8.5% India
5.7% France
4.5% Italy
3.8% United Kingdom
2.3% Austria
2.0% Japan
1.7% Spain
1.5% Pakistan
1.5% Indonesia
1.4% China
1.4% Russia
1.4% Canada
1.0% Switzerland
1.0% Poland
0.9% Turkey
0.8% Greece
0.8% Australia
0.8% Mexico
0.7% Ukraine
0.7% Brazil
0.6% South Africa
0.5% Netherlands
0.5% Iran
0.5% Romania
0.5% Thailand
12.2% others

Where people go on Fotolia.com:
63.4% de.fotolia.com
12.7% fotolia.com
6.3% fr.fotolia.com
3.8% us.fotolia.com
3.6% eu.fotolia.com
2.0% es.fotolia.com 1.9%
it.fotolia.com 1.5%
en.fotolia.com 1.4%
admin.fotolia.com 1.0%
pl.fotolia.com 0.6%
jp.fotolia.com 0.5%
static-p3.fotolia.com 0.4%
static-p4.fotolia.com 0.3%
pt.fotolia.com 0.2%
download.fotolia.com 0.2%
blog.fotolia.com 0.1%

Regards

David

ThomasAmby · « **Reply #19 on:** January 02, 2010, 07:53 »

I didn't fill out the online W-8 BEN form from their tax center yet, and that's probably the reason why all of my sales are getting deducted from. I'm figuring if I filled it out (without the ITIN) only U.S. sales would be affected.

I'm wondering, if I fill it out now without the ITIN, can I get back later when I have it and re-submit it with the ITIN?

FD · « **Reply #20 on:** January 02, 2010, 08:06 »

Quote from: ThomasAmby on January 02, 2010, 07:53

I didn't fill out the online W-8 BEN form from their tax center yet, and that's probably the reason why all of my sales are getting deducted from. I'm figuring if I filled it out (without the ITIN) only U.S. sales would be affected.

No. I filled the form out without an ITIN number too. It was accepted but in the acceptance email it was clearly stated that without ITIN number, the tax would be applied.

ThomasAmby · « **Reply #21 on:** January 02, 2010, 08:16 »

Quote from: FD-amateur on January 02, 2010, 08:06

Quote from: ThomasAmby on January 02, 2010, 07:53
I didn't fill out the online W-8 BEN form from their tax center yet, and that's probably the reason why all of my sales are getting deducted from. I'm figuring if I filled it out (without the ITIN) only U.S. sales would be affected.

No. I filled the form out without an ITIN number too. It was accepted but in the acceptance email it was clearly stated that without ITIN number, the tax would be applied.

Tax will be applied, yes, but on ALL sales or on U.S. sales only? If on all sales, isn't that illegal? And in this case what would be the point of filling it out?

Danicek · « **Reply #22 on:** January 02, 2010, 09:02 »

Quote from: ThomasAmby on January 02, 2010, 08:16

Quote from: FD-amateur on January 02, 2010, 08:06
Quote from: ThomasAmby on January 02, 2010, 07:53
I didn't fill out the online W-8 BEN form from their tax center yet, and that's probably the reason why all of my sales are getting deducted from. I'm figuring if I filled it out (without the ITIN) only U.S. sales would be affected.

No. I filled the form out without an ITIN number too. It was accepted but in the acceptance email it was clearly stated that without ITIN number, the tax would be applied.

Tax will be applied, yes, but on ALL sales or on U.S. sales only? If on all sales, isn't that illegal? And in this case what would be the point of filling it out?

Yes, I would say it is illegal. This thing is handled by FT so poorly that I can't believe business can be run this way. By this time they should have clear answer to if they are really withholding taxes on all sales and if so if it is by mistake or if it is intentional and why and what will be done in case it is by mistake.

However so far there are just uninformed replies from moderators on FT forum (not knowing anything more than normal user). Online business like this has to have 24/7 support being able to trouble shoot such critical issues like this. Or do they think this is something less than critical for people relaying on the income?

fotografer · « **Reply #23 on:** January 02, 2010, 09:18 »

50% of my sales have had the tax applied to them. I'm suprised by the amount as when they used to show who the buyers were I think that only 1 or 2 % were from America. I'm liking the 14 and 16 credit sales though.

gostwyck · « **Reply #24 on:** January 02, 2010, 09:26 »

Quote from: Danicek on January 02, 2010, 09:02

Yes, I would say it is illegal. This thing is handled by FT so poorly that I can't believe business can be run this way. By this time they should have clear answer to if they are really withholding taxes on all sales and if so if it is by mistake or if it is intentional and why and what will be done in case it is by mistake.

However so far there are just uninformed replies from moderators on FT forum (not knowing anything more than normal user). Online business like this has to have 24/7 support being able to trouble shoot such critical issues like this. Or do they think this is something less than critical for people relaying on the income?

Exactly. Not only that but if you live in a 'treaty country' then they should only be withholding a reduced amount anyway __ 10% for contributors in the UK for example.

Are Fotolia actually trying to make us all go exclusive with Istock? They certainly appear to be acting as IS's Chief Recruiting Sergeant.

They need to get their act together very quickly on this issue or they'll be a mass exodus of contributors within a few months when the lock-ins at other agencies have expired __ me included.